Singapore has emerged as a pivotal offshore hub in China's strategy to internationalise its currency, the renminbi (RMB), and reduce dependence on the US dollar-dominated global financial system. According to a new article published by the Organisation for Research on China and Asia (ORCA), the city-state is actively facilitating China's monetary and capital flows across Southeast Asia, positioning itself as the region's primary gateway for RMB expansion.

Singapore's Growing Role in Offshore RMB Markets

Citing the People's Bank of China's 2025 RMB Internationalisation Report, the ORCA article notes that Singapore now ranks among the top offshore RMB hubs globally, second only to Hong Kong. The city-state accounts for 276 billion RMB worth of deposits and contributes a growing share of RMB trading and cross-border settlements in Southeast Asia.

The recent designation of DBS Bank as Singapore's second RMB clearing bank — joining ICBC Singapore, which was appointed in 2013 — further strengthens its standing in global offshore RMB markets. Together, these two clearing banks enhance direct access to Chinese financial markets for regional institutions. Singapore recorded 9.7 trillion RMB in payments clearing in 2024, according to the article authored by Omkar Bhole.

Why China Needs Singapore

China faces structural constraints that limit the RMB's global acceptance — chief among them restricted capital mobility and regulatory uncertainty. Singapore, the article argues, acts as a stable external gateway that allows China to shape a gradual, regionally anchored RMB ecosystem without fully opening its capital account.

Notably, as Beijing's security-driven priorities for Hong Kong increasingly affect its financial role, Singapore offers a politically neutral, globally trusted platform. This makes the city-state strategically indispensable for China's monetary ambitions at a time when Hong Kong's appeal as an offshore financial centre faces growing scrutiny.

Integration with China's Alternative Payment Infrastructure

Three Singapore-based banks have joined China's Cross-Border Interbank Payment System (CIPS) — an alternative to SWIFT — which reduces payment costs and clearing times for RMB transactions. This integration not only makes these institutions attractive for RMB-based settlements but also advances China's broader goal of building an alternative global financial architecture, the article observes.

Additionally, expanded access to China's bond market, now exceeding $25 trillion, enables Singapore-based institutions a greater role in facilitating foreign participation in RMB markets, further deepening the bilateral financial linkage.

Singapore's Strategic Calculus

The arrangement is far from one-sided. As a global financial centre dependent on cross-border capital flows, Singapore stands to capture a growing share of China-linked trade settlement, wealth management, and capital market activity — particularly as ASEAN economies continue to deepen integration with China.

For Singapore, aligning with RMB internationalisation is a calculated bet to embed itself in China–ASEAN economic integration while simultaneously diversifying its financial opportunities and managing associated risks. As the RMB's global footprint expands, Singapore's early positioning could yield compounding strategic dividends in the years ahead.